Indian pharma's young blood takes over as drug dynasties crack the succession code

Mint

5 days ago

Some of India's largest pharmaceutical firms, including Sun Pharmaceutical Industries Ltd and Torrent Pharmaceuticals Ltd, are priming the next generation of their promoter families to take over the reins.
On 20 May, Torrent Pharma announced the appointment of Aman Mehta (33), son of chairman Samir Mehta and a third-generation member of the Torrent Group's founder family, as managing director effective 1 August. The company said in a press statement that the appointment was part of 'our long-term strategic vision and succession planning".
The same week, Sun Pharma announced the appointment of Vidhi Shanghvi, daughter of founder and managing director Dilip Shanghvi, as a whole time director. A few months ago, Sun Pharma elevated Aalok Shanghvi (40), Dilip Shanghvi's son, as chief operating officer.
Other pharma companies like Lupin Ltd too have seen the next generation of their promoter families take charge in recent years. With the Indian pharmaceutical industry growing at a significant rate, the top companies in the sector are being closely watched for the evolution they are undertaking.
Experts believe such successions must be planned with foresight, factoring in ideal transition times, grooming, and the role of other veteran executives in shaping up the incoming leaders.
'If one has to think about a template, I think a good template is one where there is a fair bit of overlap between the senior generation and the next generation. And the next generation gets a good chance to actually experience different parts of the business," said Amit Misra, managing director with consultancy firm Alvarez and Marsal's healthcare and life sciences practice in Mumbai.
Aman Mehta, the newly appointed managing director of Torrent Pharma, is a whole-time director at Torrent Pharma. He was appointed as a director in 2022 and has been primarily involved with Torrent Pharma's India business, the company's largest revenue contributor.
According to Torrent's press statement, Mehta played an instrumental role in the integration of the Unichem Laboratories Ltd acquisition and the strategic identification and integration of Curatio Healthcare Pvt. Ltd. Torrent's acquisition of Unichem's branded India and Nepal business in 2017 significantly boosted its presence in key segments. Torrent acquired 100% of Curatio in 2022.
Similarly, Aalok Shanghvi, who was brought into the Sun Pharma fold in 2006, has handled various roles in marketing, research and development, project management, purchase, and communications, according to information on the company's website.
Over the past two decades, Shanghvi has headed Sun's business in Bangladesh and later emerging markets, spanning 80 countries. Subsequently, he also took charge of Sun's global generic R&D, global generic business development, and API (active pharmaceutical ingredients) functions.
Vidhi Shanghvi began her career at Sun Pharma in 2012 as a brand manager within the India business, and took over as business head of Sun Pharma's consumer healthcare business in 2015, following its merger with Ranbaxy Laboratories Ltd.
'Promoters need to not parachute their progeny into the boards, but groom them from the shop floor, be it in an accelerated manner, and then expose them to internal and external stakeholders," said Shriram Subramanian, founder and managing director of InGovern Research Services.
The role of incumbent senior executives and how they evolve must also be planned, he said. 'At least the senior level executives' succession planning should be a process and discussed at the board level," Subramanian said, adding that uncertainties around leadership must be factored in and planned for.
An ideal transition would involve a transition of erstwhile leadership as well, said Misra of Alvarez and Marsal. 'In the sense that when you are bringing in the next generation side by side, you also start to help them choose their team, while some of the stalwarts remain in advisory positions," he explained.
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Corporate successions: A tricky path
India's corporate landscape is riddled with high-profile family disputes even in instances where the promoter families had drawn up legal frameworks to ensure a smooth transition.
Factions of the Kirloskar family are feuding over a 2009 deed of family settlement that outlined the distribution of ownership, management, and control of various Kirloskar entities—including Kirloskar Brothers Ltd and Kirloskar Oil Engines Ltd—among different branches of the family.
Babasaheb Kalyani, the billionaire promoter of the Kalyani group, and his sister Sugandha Hiremath have been in a dispute for longer than a decade over the family's group companies such as Bharat Forge Ltd and Kalyani Steels Ltd, as well as private assets like land, real estate, and jewellery.
The Lodha brothers—real estate developers Abhishek and Abhinandan—only last month resolved their dispute over the 'Lodha' brand identity after a longdrawn mediation and with the guidance of their parents.
Messy legal disputes aside, corporate successions tend to be mired in other seemingly mundane challenges that need to be factored in.
For instance, corporate successors following in the footsteps of senior family members who built successful businesses would want to develop their own styles and strategies while continuing the company's growth and legacy.
'The challenge for the next generation is to retain the differentiating factor or the competitive edge as far as the company is concerned," Misra said. 'If a successor tries to just cut copy-paste, it won't work because that did not work even in the case of the previous generation," he added.
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For companies facing a vacuum when it comes to finding successors from within the family, the focus needs to be on bringing in professional talent who align with the firm's culture and vision, while also fostering loyalty and longevity in this leadership.
Take the case of Cipla. After heir apparent Kamil Hamied, nephew of Cipla doyen Dr. Y.K. Hamied, stepped down as chief strategy officer in 2015 to pursue personal interests, the company brought in Umang Vohra, former head of Dr. Reddy's Laboratories Ltd's North America business, as its global chief financial officer. In 2016, Cipla appointed him global CEO and managing director.
What is important for the continuity of a successful business is empowering the successors—be it family members or a professional team—and ensuring they understand the company's needs, experts said.
'The point remains that even in cases where the vacuum is not there, empowering some of these people so that their leadership styles start getting noticed and they get the opportunity to be known, is extremely important," Misra emphasised.